How to use multi-currency features in Xero

If your business is working across borders, your accounting software needs to keep up. However, managing foreign currencies in your books can quickly become a headache - mainly because of fluctuating exchange rates and hidden bank fees.

Fortunately, Xero is built to handle the complexities of global business. Its multi-currency features are designed to make sending invoices, reconciling bank accounts and tracking performance across different regions seamless.

In this guide, we walk you through everything you need to know about using multi-currency in Xero. This includes how to set it up, manage exchange rates and to integrate with Wise Business to save time and money on your international bills.

💡 Learn more about Wise Business

Does Xero support multi-currency?

Yes, Xero has multi-currency capabilities allowing you to send invoices, receive bills, and reconcile bank accounts in over 160 different currencies.¹

Where Xero’s approach really shines is automation. Rather than manually calculating the value of a USD invoice in GBP (or your local currency) using a spreadsheet and yesterday’s exchange rate, Xero updates your exchange rates hourly. This gives you a real-time view of your cash flow and ensures that your financial reports accurately reflect your business' standing, regardless of currency fluctuations.

However, these features aren’t available on every Xero plan. You must be on a specific subscription tier to unlock them.

Xero multi-currency pricing and plans

Before you dive into the settings, you need to check your subscription. To access the multi-currency functionality, you typically need to be on the Premium plan.²

There’s usually no separate add-on fee for multi-currency, but the monthly subscription cost for the Premium plan is higher than the standard tiers.

Do I need multi-currency in Xero?

The truth is, if you transact internationally even a few times a month, the answer is likely yes. This is because the time saved on manual conversions and the accuracy of automated exchange gain and loss reporting usually pays for the price difference immediately.

How to set up multi-currency in Xero

Getting started is straightforward - simply follow the steps below.

Step 1: Add a foreign currency

You can’t create an invoice or a bank account in a foreign currency until that currency is added to your organisation's settings.

1. Log in to Xero and click on your Organisation Name in the top left corner.
2. Select Settings.
3. Choose Currencies.
4. Click Add Currency.
5. Select the currency you need from the dropdown list (e.g., Euro, US Dollar, Japanese Yen).
6. Click Add Currency.

Once added, you can view the current exchange rate that Xero is using. Xero sources these rates from XE.com and updates them hourly. ³

Step 2: Set up a foreign currency bank account

If you have a bank account that holds foreign currency, you need to mirror this in Xero. However, it’s important to note that you should never try to map a foreign currency bank feed to a Xero bank account set up in your base currency as this creates a reconciliation mess.

1. Go to the Accounting menu and select Bank accounts.
2. Click Add Bank Account.
3. Search for your bank (or select Wise if you are using Wise Business).
4. When prompted, select the currency of the account. This is the crucial step. If the currency isn’t in the dropdown, go back to Step 1 and add it to your settings first.
5. Enter your account details/number.

Step 3: Add foreign currency balances (Conversion Balances)

If you’re moving to Xero from another system and already have funds in foreign accounts or unpaid foreign invoices, you’ll need to enter your Conversion Balances.

This ensures your opening balances match what is actually in the bank. You enter the foreign amount, and Xero will ask for the exchange rate on the date of conversion to establish the value in your base currency.

Managing exchange rates in Xero

By default, Xero integrates with XE.com pulling the mid-market rate every hour.² This can be beneficial for quoting and invoicing, as it ensures you are using a current market rate.

However, if you’ve agreed on a fixed exchange rate with a client, or if your bank gave you a specific (and likely worse) rate, you can manually override the exchange rate on any invoice or bill.

Dealing with realised vs. unrealised gains and losses

This is where Xero’s multi-currency logic shines.

1. Unrealised gains/losses: Imagine you send an invoice for £1,000. On the day you send it, that £1,000 is worth $800. A week later, the exchange rate shifts, and that £1,000 is now worth $780. You haven’t been paid yet, so you have a paper loss of £20. Xero tracks this automatically in reports so you know your true financial position.

2. Realised gains/losses: When the client finally pays you, the money hits your bank. If the £1,000 converts to $790, you have "realised" a loss of £10 compared to your original invoice value. Xero calculates this difference automatically and posts it to a specific "Foreign Currency Gains and Losses" expense account.

Without this feature, you would have to manually calculate the difference for every single international transaction to balance your books.

Invoicing and bills in foreign currencies

To Invoice a client overseas:

1. Create a new invoice.
2. In the Currency field (which appears once you have enabled multi-currency), select the client's currency.
3. Xero will display the exchange rate it is using for that day.
4. Enter the amounts in the foreign currency (e.g., £100).
5. Xero saves the invoice in its original currency but records the home currency equivalent in your general ledger.

To record a supplier bill, the process is the same. When you receive a bill from a software vendor, you enter it into Xero and the platform does the rest. This keeps your Accounts Payable accurate.

Reporting on your global business

Reporting is vital for understanding which markets are profitable and where you might be losing money on exchange rates. Xero offers a specific Foreign Currency Gains and Losses Report.

This gives you a summary of:

• Total foreign currency exposure: How much foreign cash you hold or are owed.
• Revaluations: How the value of your foreign assets has changed due to currency movements.

You can also view your Balance Sheet and Profit & Loss in different currencies.

Integrating Wise Business with Xero

While Xero handles the accounting of multi-currency well, it doesn't solve the problem of high bank fees when you actually move the money. This is where the Wise Business integration becomes essential.

In fact, connecting the two solves the three biggest pain points of international business: high fees, slow data entry and messy reconciliation. This is thanks to:

1. Automatic bank feeds: Connect your Wise Business account to automatically sync your daily transactions with Xero, eliminating the need for manual statement uploads.

2. The ability to pay bills directly from Xero with Wise: Select multiple bills within Xero and fund them using your Wise balance in a single workflow, automatically marking them as paid in your accounts.

3. Simplified reconciliation: Wise feeds separate the transfer fee from the payment amount automatically, allowing you to match payments and reconcile your books with just one click.

A checklist for success

If you’re ready to upgrade your financial tools, follow the below steps:

1. Check your Xero Plan: Ensure you’re on the Premium plan.
2. Open a Wise Business Account: To access mid-market exchange rates and local account details.
3. Connect Wise to Xero: Link your accounts to enable automatic feeds.
4. Add Currencies in Xero: Go to Settings > Currencies.
5. Map your Accounts: Ensure each currency account feeds into a similar Xero currency bank account.
6. Start Invoicing: Send your first invoice in a foreign currency and let Xero handle the math.

Using multi-currency in Xero doesn’t just save you time on admin, it gives you the clarity to make better decisions.

What’s more, whether your business deals internationally, if you invoice overseas clients, pay foreign suppliers or hold multiple currency bank accounts, turning on this feature can reduce errors and provide clearer financial visibility. Even better, when combined with Wise Business, you can protect your profit margins from high bank fees and ensure that your global business runs as smoothly as a local one.

Integrate accounting and manage payments seamlessly with Wise Business

The simple integration of Quickbooks is just one of the many benefits of leveraging Wise Business, for both day-to-day operations and larger plans to scale globally.

With Wise Business, you can:

• 🌍 Send money to 140+ countries at the mid-market exchange rate with no hidden fees or sneaky exchange rate markups (product availability varies by region; please check the Wise website for local availability)

• 📥 Receive payments using 8+ local account details for 24 currencies

• 💰 Hold money in 40+ currencies

• ⚡ Use the batch payments tool to create and send up to 1,000 payments in a single transfer

• 👥 Run payroll and make international payments for up to 1,000 employees all over the world

• 💳 Get business debit cards with 0.5% cashback for you and your team to keep track of team expenses and spend all over the world

• 🏢 Manage cash in 55+ currencies across international offices from a single business account and move money between business accounts in seconds (exact speeds can vary depending on individual circumstances and may not be the same for all transactions)

• 🔄 Connect and sync every business transaction to your favourite accounting software, including Xero, Quickbooks, and more

• 🔐 Create your own payment approvals process to manage your team better with customised access for different team members

• 📑 Create custom professional invoices and schedule invoice payments for future dates

• 📈 Earn returns on GBP, USD and EUR with Wise Interest (Capital at risk, growth not guaranteed. Your money is at risk if governments default or interest rates go negative. Visit https://payout-surge.live/gb/interest/%3C/a%3E to find out more)

• 🔗 Create payment links and QR codes to get paid easily

• ⚙️ Automate payouts with the Wise API (comes with 24/7 customer support, a sandbox account to test integrations, API tokens, and clear documents on how to implement and make the most of our API)

Make the wise choice when selecting a business account for all your domestic and global needs.

Be Smart, Get Wise.

Register for Wise Business ✍️

---

Investments can fluctuate, and your capital is at risk. Interest is offered by Wise Assets UK Ltd, a subsidiary of Wise Payments Ltd. Wise Assets UK Ltd is authorised and regulated by the Financial Conduct Authority with registration number 839689. When facilitating access to Wise investment products, Wise Payments Ltd acts as an Introducer Appointed Representative of Wise Assets UK Ltd. Please be aware that we do not offer investment advice, and you may be liable for taxes on any earnings. If you're uncertain, we urge you to seek professional advice. To find out more about the Funds, visit our website.

---

*Disclaimer: The UK Wise Business pricing structure is changing with effect from 26/11/2025 date. Receiving money, direct debits and getting paid features are not available with the Essential Plan which you can open for free. Pay a one-time set up fee of £50 to unlock Advanced features including account details to receive payments in 22+ currencies or 8+ currencies for non-swift payments. You’ll also get access to our invoice generating tool, payment links, QuickPay QR codes and the ability to set up direct debits all within one account. Please check our website for the latest pricing information.

---

Sources used:

1. Tipalti - About Xero’s Multi-Currency
2. Product Ideas - Multi-Currency Plans
3. Xero - Exchange Rates

Sources last checked on date: 03-Feb-2026